House prices fell by 0.4% in April, reversing some of the surprise 0.9% rise in March, the Nationwide building society said today.

The return to falling prices brought the average cost of a home in the UK down to £151,861 – 15% lower than in April last year.

The society said there were signs that the pace of decline was easing, with the three-month rate of change, which is a better indication of trend than the one-month figure, falling from -4.1% in March to -3.1%.

However, it said it was too early to talk of a housing market revival. Nationwide's chief economist, Fionnuala Earley, said that although falling house prices had made homes more affordable to first-time buyers, caution about the future direction of the property market was still restricting activity.

She said the decision to keep the stamp duty threshold at £175,000 until the end of the year, announced in last week's budget, was welcome, but unlikely to stimulate a significant increase in sales.

"It is possible that the extended period of the higher threshold will be more of an incentive for first-time buyers to enter the market now that affordability has improved due to falling interest rates and house prices," she said. "But it seems more likely that, for the most part, buyers will remain cautious as long as they think that prices will continue to fall."

The government scheme to boost the availability of mortgages by offering guarantees for new mortgage-backed securities is also unlikely to make a big impact on the market, Earley said.

"Lenders have already indicated that the availability of credit is less of an issue than it has been, but at the same time expect that the demand for secured lending will fall further.

"Given the weakness of the economy and the expected further increase in unemployment this comes as no surprise."

Land Registry figures

Last month's figures from the society took commentators by surprise and were almost immediately contradicted by rival lender Halifax, which reported a 1.9% fall in March.

Today, figures from the Land Registry confirmed that in many areas the market was still falling last month, although the pace of decline seemed to be slowing and some areas did see prices rise.

Its latest snapshot of the market showed that house prices dropped by 0.4% in England and Wales in March, the lowest monthly fall in 11 months.

The Land Registry index, which records the completed sales price of all homes that have changed hands at least once before, put the average price of a property in England and Wales at £152,895 – 16.2% less than in March last year and the same price as in August 2004.

However, it said that in London prices increased by 0.6% over the month, while in Wales prices rose by 1%. In the north-east and south-west house prices jumped by 1.1% and 1.8% respectively.

Michael White, chief executive of broker Email Mortgages, said it was no surprise to see the market falling again after last month's shock rise.

"A return to a monthly fall in April seems to show the market was right to be cautious about any perception that house prices had reached their floor and were on the rise again.

"The 0.4% fall seems to reflect the majority of other indices which continue to show that UK house prices are still falling and will probably continue in the same vein for at least the rest of 2009."

He added that lenders still needed to take "a much more borrower-friendly stance" before prices could start to rise again.

"At the moment, too many prospective purchasers are unable to get the mortgage finance they need to get on the property ladder – high loan-to-value products are still in short supply and until lenders feel confident enough to move up the risk curve and meet their responsibilities to these borrowers, we are unlikely to see any regular and sustained movement upwards in house prices for the foreseeable future."

Ed Stansfield, property economist at Capital Economics, agreed the housing market correction was still some way from being over.

"Although the recent upturn in buyer interest may encourage sellers to hold out for higher prices, thus slowing the rate of house price falls over the next few months, ultimately the combined effect of rising unemployment and widespread pay freezes will mean that prices fall considerably further," he said.